Texas’ June unemployment rate fell to 8.6% — a drop from the 13% May jobless rate, according to a Friday morning U.S. Bureau of Labor Statistics report.
While it's an improvement from April's record-high 13.5% unemployment rate, June's figure shows the devastating financial toll on Texans as the coronavirus pandemic upends the economy. Before the pandemic began, the unemployment rate in February was 3.5%. Almost 3 million Texans have filed for unemployment benefits since mid-March.
Economists warn that the decrease in the state jobless rate may not indicate sustained economic stabilization, given that Texas businesses were open for most of June before Gov. Greg Abbott closed down bars, capped restaurant occupancy at 50% and limited outdoor gatherings of more than 100 people. Economists say that may prompt an increase in the July unemployment rate.
“The figures for June will not capture the impact of the governor reclosing bars and limiting social gatherings,” Richard Murphy, an assistant professor of economics at the University of Texas at Austin, wrote in an email.
Texas coronavirus hospitalizations and deaths have continued to hit record highs over the past several weeks as hospitals around the state are being overwhelmed with patients. For the majority of June, Abbott allowed almost all businesses to operate with at least 50% capacity.
"So we'll have to really see how the COVID-19 growth rate really stabilizes, or does it go up or comes down even," said Venkatesh Shankar, a marketing professor at Texas A&M University. "That also drives the unemployment statistics.”
Some things could help the economy, though. Shankar also said that the price of oil has stabilized at $40 per barrel after suffering a crash earlier this year.
“The unemployment rate could also go down because there are more jobs to be done in the oil and gas industry now than two months ago,” Shankar said.